First up is TSRI (first mentioned here). Last night they announced a special dividend of $1.50 per share, and the stock price shot up from ~$3.90 to $4.90 as a result. However, I think there’s still plenty of upside left. TSRI has (before paying the special dividend) net cash of $4.15 per share and NCAV of just over $6.20 per share (book value basically equals NCAV in this case).

Thus, even after this big pop, the market is valuing TSRI’s core business at barely more than cash and for a significant discount to NCAV. While the business is currently losing money, TSRI has attributed a lot of that to investments they’ve been making for future growth, and revenue was up ~15% YoY from fiscal 2011 to 2012. In other words, even after the big run up, it still seems to me that TSRI is a business selling for less than liquidation value despite a pathway for solid profits ahead of it.

The second stock is a bit close to my heart. It’s Solitron (SODI), and they recently had several interesting catalysts. First, and most importantly, the company repurchased a nice little chunk of shares and will hold an annual meeting for the first time in (literally) decades during the middle of next year. I have no doubt that these new, shareholder friendly moves are in large part the work of some value bloggers, specifically Nate at oddball and Jeff at ragnar. Congrats on a job well done guys!

However, a bit lost in those two nice tid-bits has been the presence of some large new shareholders. One shareholder filed the sparsest 13-D I’ve ever seen and owns 6%-ish of the company. While I don’t know much about them, I have seen the other new shareholder at work before once or twice. That shareholder is Nicholas Swenson, who bought another 6% of the company. I don’t know much about him, but I have seen him push several other net-nets for board seats and/or to sell themselves. While his filing was only a 13-G at this point, I wouldn’t be surprised to eventually see him push for a board seat at the annual meeting.

Like TSRI, SODI has responded to all this news w/ pretty strong price performance. The stock is up from $3.00 pre-buyback announcement to ~$3.30 (though the bid-ask is still wide). But SODI is still trading for barely more than its net cash and way below what any rational business man would pay to acquire the company. In fact, given the new found shareholder friendly-ness, in many ways SODI may be cheaper today at $3.30 per share than it was two weeks ago at $3.00 per share.

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